With the Affordable Care Act’s (ACA) enhanced premium tax credits set to expire on December 31, 2025, average premium costs in 2026 will more than double for the more than 20 million Americans who rely on financial assistance to afford marketplace plans. Rather than prioritizing a simple and clean extension of the enhanced premium tax credits, as proposed by Senate Democrats, Senate Republicans have proposed an alternative, convoluted framework centered on health savings accounts (HSAs) and high-deductible health plans (HDHPs). These policy proposals are recycled ideas that have been soundly rejected by experts because they shift more financial risk onto families and undermine marketplace stability.
HSAs and HDHPs are not an affordability strategy
Proposals from Sens. Bill Cassidy (R-LA), Mike Crapo (R-ID), and Rick Scott (R-FL) preview how they would reshape the ACA if the enhanced premium tax credits expire.
Under the leading Republican Senate proposal from Sens. Cassidy and Crapo, federal funding currently used for the enhanced tax credits would instead be deposited into individual HSAs for people enrolling in bronze or catastrophic plans. Enrollees earning less than 700 percent of the federal poverty level would receive $1,000 if they are 18 to 49 years old and $1,500 if they are 50 to 64 years old. However, an HSA deposit of $1,000 to $1,500 cannot offset premiums of hundreds or thousands of dollars per month once the enhanced tax credits expire.
Moreover, HSA funds can only be used with bronze or catastrophic plans, which typically carry the highest deductibles and offer the least generous coverage. In 2026, the average bronze plan deductible is nearly $7,500—five to seven times larger than the proposed HSA deposit amount. Individuals and families with chronic conditions or high expected health care costs would see their out-of-pocket burdens soar under an HSA-first system.
Sen. Scott’s bill goes even further, redirecting even base ACA tax credits into “Trump Health Freedom Accounts” for people enrolled in high-deductible health plans.
Senate Republicans’ HSA-centered proposals redirect federal resources upward, leaving the people most at risk of losing coverage with the least assistance.
Both proposals fundamentally misjudge how families experience health care costs. A December 2025 KFF poll of marketplace enrollees found that 51 percent reported difficulty affording their health insurance premiums and 61 percent reported difficulty affording out-of-pocket costs, including deductibles. An HSA-first system does nothing to address these concerns.
HSAs disproportionately benefit people with higher incomes. The tax advantages are worth more to individuals in higher tax brackets, and higher-income families are best positioned to contribute additional savings. Meanwhile, low- and middle-income families receive far less value. Senate Republicans’ HSA-centered proposals redirect federal resources upward, leaving the people most at risk of losing coverage with the least assistance.
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Restoring cost-sharing reduction payments will not address premium affordability
The Cassidy-Crapo bill would begin appropriating cost-sharing reduction (CSR) payments in 2027. CSRs were originally designed to reduce out-of-pocket expenses—such as deductibles, copayments, and coinsurance—for low-income marketplace enrollees. But in 2017, the Trump administration ended CSR payments to insurers, arguing that Congress had not explicitly appropriated the funds. Insurers responded by increasing premiums, primarily for silver plans, to cover the cost—a practice known as “silver loading.” Because tax credits are linked to silver premiums, this resulted in larger tax credits, which reduced premiums for more comprehensive plans.
Reversing this process would therefore increase premiums for more comprehensive plans. As a result, the nonpartisan Congressional Budget Office (CBO) projects that this policy would cause 300,000 people to lose coverage by 2034.
Risk pool segmentation will further drive up premiums
Risk pool stability is at the core of the ACA’s marketplace design. Redirecting federal funding into HSAs tied to bronze, catastrophic, or high-deductible plans would shift healthier individuals into these lower-value options, leaving relatively sicker people concentrated in the more comprehensive plans. The remaining risk pool would have higher average costs, forcing insurers to raise premiums.
The Cassidy-Crapo bill accelerates this problem by expanding catastrophic plan eligibility to everyone, not just those under 30 or with hardship exemptions. And Sen. Scott’s bill exacerbates the same dynamic by redirecting all ACA premium tax credits into HSAs. Higher premiums would drive out even more healthy people, triggering a premium “death spiral,” where rising premiums drive healthier enrollees out of the risk pool, which forces insurers to further increase premiums, eventually making coverage unsustainable.
Implementation realities make proposals unviable
Beyond their policy flaws, Senate Republican proposals also face significant implementation hurdles that render them unworkable for 2026. Americans are making coverage decisions now, yet these proposals have no specifics on when families would receive HSA deposits or how the accounts would be administered. In the meantime, marketplace enrollees would be expected to shoulder dramatically higher premiums beginning January 1, 2026, without any upfront assistance. The CBO projects that without enhanced premium tax credits, nearly 4 million more people will be uninsured by 2034.
Deregulated products will further increase premium costs
While not included in the proposals put forward by Sens. Cassidy, Crapo, and Scott, another pillar of the congressional Republican health care agenda is the return to deregulated, low-value coverage—such as short-term limited-duration insurance, association health plans, and other non-ACA-compliant products. These plans have lower premiums because they offer less coverage. They often have limited benefits that exclude maternity care, mental health services, and prescription drugs; can impose annual or lifetime limits; and can deny coverage based on preexisting conditions. These stripped-down products skim off younger, healthier individuals who believe they won’t need much care, leaving ACA plans with a disproportionately older and sicker population. As healthy people exit, premiums rise.
Conclusion
Senate Republicans’ alternative to extending the enhanced premium tax credits is not a real health care plan. It shifts financial risk onto families, fractures insurance markets, and revives low-value products that have failed consumers in the past. At a moment when millions of Americans face significant premium hikes, Congress must choose the only viable path—extending the enhanced premium tax credits.